United States District Court, D. Massachusetts
MEMORANDUM AND ORDER RE: PLAINTIFF'S MOTION TO
AMEND COMPLAINT (DOCKET ENTRY # 35)
MARIANNE B. BOWLER UNITED STATES MAGISTRATE JUDGE.
before this court is a motion to amend the complaint filed by
plaintiff Pankj Merchia (“plaintiff” or
“Merchia”). Defendant United States of America
(“defendant” or “United States”)
opposes the motion. (Docket Entry # 42). After conducting a
hearing on March 6, 2019, this court took the motion (Docket
Entry # 35) under advisement.
initiated this action on March 5, 2018 by filing a complaint
against the United States for “taxes erroneously
collected.” (Docket Entry # 1, p. 1). On December 31,
2018, Merchia moved to amend the complaint to add claims
against individual agents of the Internal Revenue Service
(“IRS”) for “willful[ly] withholding”
his tax refund and for levying his bank accounts and placing
liens on his property, despite knowing for more than four
years that the IRS owed him a refund of over $4 million.
(Docket Entry # 34, pp. 7-10). As best as can be discerned
from the proposed pro se amended complaint, which is largely
bereft of statutory citations, it includes claims against the
United States, “Commissioner of the IRS” John
Koskinen (“Koskinen”), “officer Alice
Bucciero of IRS appeals” (“Bucciero”),
“IRS revenue agent Mia Alonzo”
(“Alonzo”), “IRS Examination Supervisor
Teresa Peters” (“Peters”), and “at
least 6 other unnamed IRS employees in their individual
capacity” for: (1) reckless, intentional, or negligent
disregard of IRS regulation 26 C.F.R. § 15a.453-1 in
violation of 26 U.S.C. § 7433 (“section
7433”) (Count One); (2) knowing or negligent failure to
release a tax lien (Docket Entry # 34, p. 8), presumably in
violation of 26 U.S.C. § 7432 (“section
7432”), which allows civil actions against the United
States for failing “to release a lien” (Count
Two); and (3) erroneous or illegal assessment and collection
of taxes in violation of 26 U.S.C. § 7422 and 28 U.S.C.
§ 1346 (Count Three). (Docket Entry # 34). The proposed
amended complaint also sets out Bivens claims
against the individual IRS employees (Count Four). (Docket
Entry # 34).
United States seeks denial of the motion to amend the
complaint because the proposed amended “complaint would
not survive a motion to dismiss” and is therefore
futile. (Docket Entry # 42, p. 1). It argues that the
amendments are futile because they attempt to “assert a
Bivens cause of action where an alternate statutory
remedy exists” and because “plaintiff has not
demonstrated that he complied with strict waivers of
sovereign immunity regarding the proposed statutory causes of
action.” (Docket Entry # 42, p. 7).
court should freely give leave when justice so requires,
” Fed.R.Civ.P. 15(a)(2), but “[c]ourts may deny
such leave to amend . . . if the amendment would be
‘futile.'” Sultaliev v. Rodriguez,
263 F.Supp.3d 352, 357 (D. Mass. 2017) (citing Palmer v.
Champion Mortg., 465 F.3d 24, 30 (1st Cir. 2006)). An
amendment is futile if the proposed “amended complaint
‘could not withstand a 12(b)(6) motion to
dismiss.'” McMann v. Selene Fin. LP for
Wilmington Sav. Fund Soc'y, FSB, 332 F.Supp.3d 481,
487 (D. Mass. 2018) (citation omitted); accord Rife v.
One W. Bank, F.S.B., 873 F.3d 17, 21 (1st Cir. 2017)
(“‘[f]utility' means that the complaint, as
amended, would fail to state a claim upon which relief could
be granted”) (internal citation omitted).
survive a Fed.R.Civ.P. 12(b)(6) (“Rule 12(b)(6)”)
motion to dismiss, the complaint must include factual
allegations that when taken as true demonstrate a plausible
claim to relief even if actual proof of the facts is
improbable. See Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555-58 (2007). Thus, while “not equivalent to
a probability requirement, the plausibility standard asks for
more than a sheer possibility that a defendant has acted
unlawfully.” Boroian v. Mueller, 616 F.3d 60,
65 (1st Cir. 2010) (internal quotation marks and citation
omitted). “[A]ccepting as true all well-pleaded facts
in the complaint and making all reasonable inferences in the
plaintiff's favor, ” id. at 64, the
“factual allegations ‘must be enough to raise a
right to relief above the speculative level.'”
Gorelik v. Costin, 605 F.3d 118, 121 (1st Cir. 2010)
(internal citation omitted).
assessing the futility of the proposed amended complaint, it
is appropriate to consider the documents attached to the
proposed complaint (Docket Entry ## 34-1 to 34-5), which form
part of the proposed pleading. See Fed.R.Civ.P.
10(c). While “[c]ourts review pro se
complaints according to ‘less stringent standards than
formal pleadings drafted by lawyers' . . ., pro
se status does not insulate [a] party from complying
with substantive and procedural law.” Garrett v.
Ill. Attorney Gen., Civil Action No. 14-10217-RWZ, 2014
WL 652614, at *2 (D. Mass. Feb. 18, 2014) (emphasis in
original) (internal citations omitted).
January 2013, Merchia filed a tax return form 1040 for tax
year 2012, listing as income money that was owed to him, but
that he did not receive, in 2012. (Docket Entry # 34, pp.
2-3). In June 2014, having come to believe that he made a
mistake listing this “‘evidence of
indebtedness'” as income on his 2012 tax return,
Merchia filed an amended tax return form 1040x requesting a
refund based on excluding the foregoing amount of
indebtedness. (Docket Entry # 34, pp. 2-3). IRS agent Alonzo
audited Merchia's 2012 tax return. On October 1, 2015,
she and Peters notified Merchia that the IRS “would
continue to tax him in tax year 2012 on the ‘evidence
of indebtedness, '” even though Alonzo and Peters
informed Merchia on the same day that “they had no
evidence supporting Plaintiff having received the
funds.” (Docket Entry # 34, pp. 3-4).
indicated in an email, Merchia appealed the IRS' decision
not to issue a refund. (Docket Entry # 34-2). On December 14,
2015, following a review of the record, IRS appeals officer
Bucciero determined that Merchia had overpaid nearly $4.4
million in taxes for 2012 and subsequently sent him a
settlement offer. (Docket Entry # 34, pp. 4-5). This offer
would have reduced Merchia's taxes for 2012 by $4, 393,
724, but also assessed a penalty and “extra
taxes” for 2009. (Docket Entry # 34, p. 5). Believing
that the assessed penalty was unlawful,  Merchia rejected
the settlement offer. (Docket Entry # 34, p. 6).
2, 2016, an unnamed “IRS Appeals Team Manager”
sent Merchia a “Notice of Determination that provided
no refund and continued to tax Plaintiff on funds that the
IRS Appeals knew Plaintiff had not received.” (Docket
Entry # 34, p. 6). Merchia has not received a refund for his
2012 taxes and “IRS officers continue to levy [his]
bank accounts and place liens on his property.” (Docket
Entry # 34, p. 8).
proposed amended complaint also alleges that IRS Commissioner
John Koskinen (“Koskinen”) offered, and the
“[d]efendant IRS employees” accepted,
“bonuses as personal incentives effectively to maximize
the taxes they collected or did not refund.” (Docket
Entry # 34, p. 9) (emphasis omitted). In support of this
allegation, plaintiff attaches a news article regarding
“performance awards” given to “legal
experts in ...